Question

Refer to the Simon Company information in Exercises 17-7 and 17-9. Compare the company’s long- term risk and capital structure positions at the end of 2014 and 2013 by computing these ratios: In Exercise 17-7, Simon Company’s year-end balance sheets follow. Express the balance sheets in common- size percents. Round amounts to the nearest one- tenth of a percent.

In Exercise 17-9, The company’s income statements for the years ended December 31, 2014 and 2013 follow. Assume that all sales are on credit and then compute:

(1) Debt and equity ratios—percent rounded to one decimal, (2) Debt-to-equity ratio—rounded to two decimals, (3) Times interest earned—rounded to one decimal. Comment on these ratioresults.